Illinois Tool Works Inc (ITW)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 15,803,000 | 15,723,000 | 14,244,000 | 12,361,000 | 13,887,000 |
| Total current assets | US$ in thousands | 6,235,000 | 6,270,000 | 6,374,000 | 6,523,000 | 6,253,000 |
| Total current liabilities | US$ in thousands | 4,675,000 | 4,460,000 | 3,470,000 | 2,589,000 | 2,154,000 |
| Working capital turnover | 10.13 | 8.69 | 4.90 | 3.14 | 3.39 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $15,803,000K ÷ ($6,235,000K – $4,675,000K)
= 10.13
Illinois Tool Works, Inc.'s working capital turnover has shown a positive trend over the past five years, increasing from 3.44 in 2019 to 10.32 in 2023. This indicates that the company is managing its working capital more efficiently, generating more revenue relative to its working capital investments.
A higher working capital turnover ratio suggests that Illinois Tool Works, Inc. is able to convert its working capital into sales more frequently within a given period. This may be indicative of effective management of current assets and liabilities, leading to improved liquidity and potentially lower financing costs.
The significant improvement in the working capital turnover ratio over the years reflects enhanced operational efficiency and a more streamlined working capital cycle for the company. It implies that Illinois Tool Works, Inc. is utilizing its current assets and liabilities more effectively to support its business operations and generate revenue.
Overall, the increasing trend in Illinois Tool Works, Inc.'s working capital turnover indicates stronger operational performance and financial management, which may positively impact its profitability and overall financial health.
Peer comparison
Dec 31, 2023